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International Factor Mobility

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International Factor Mobility

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  1. In Home and Foreign there are two factors of production, land and labor, used to produce only one good. The land supply in each country and the technology of production are exactly the same. The marginal product of labor in each country depends on employment as shown in the Table. Initially, there are 11 workers employed in Home, but only 3 in Foreign. Find the effects of free movement of labor from Home to Foreign on employment, production, real wages, and the income of land owners in each country. International Factor Mobility Production Function

  2. Home: Employment = 11 Production = 165 Real Wage Rate = 10 Real Wages = 110 Real Rent = 55 Pre International Factor Mobility Production Function

  3. Foreign: Employment = 3 Production = 57 Real Wage Rate = 18 Real Wages = 54 Real Rent = 3 Pre International Factor Mobility Production Function

  4. Home: Employment = 7 Production = 119 Real Wage Rate = 14 Real Wages = 98 Real Rent = 21 Foreign: Employment = 7 Production = 119 Real Wage Rate = 14 Real Wages = 98 Real Rent = 21 Post International Factor Mobility

  5. Home: Employment = 11 Production = 165 Real Wage Rate = 10 Real Wages = 110 Real Rent = 55 Home: Employment = 7 Production = 119 Real Wage Rate = 14 Real Wages = 98 Real Rent = 21 Effects of International Factor Mobility

  6. Foreign: Employment = 3 Production = 57 Real Wage Rate = 18 Real Wages = 54 Real Rent = 3 Foreign: Employment = 7 Production = 119 Real Wage Rate = 14 Real Wages = 98 Real Rent = 21 Effects of International Factor Mobility

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